The euro is ready for a short term rebound | 04 December 2014

Euro

The euro rebounded upwards from the two year low against the dollar. Another portion of the weak economic Eurozone data has strengthened expectations, concerning the easing monetary policy program expansion. The pair euro/dollar rebounded from the resistance near the 25th figure with the following decrease to the lows at the level of 1.2300. The euro sharply rose and broke the resistance level of 1.2350-1.2370 upwards. The pair tested the level of 1.2425-1.2445.

The support levels are 1.2330-1.2350, and the resistance levels are 1.2425-1.2445.

MACD is in a negative territory.

Trading recommendations

The level that bears can test is the level of 1.2250-1.2270. Its breakthrough can depend on the ECB and / or the Mario Draghi’s press results and it is better to be out of the market. We should not exclude the correction continuation to the resistance level of 1.2425-1.2445.

Pound

The British pound strengthened along the entire currency market. The pound also can be supported by the reports about the "Funding for lending" scheme expansion by the Bank of England that will now be aimed at improving the lending conditions of small and medium-sized enterprises. The market's attention will be focused on the Bank of England decision announcement about the monetary policy perspectives.

The pair is trading within a narrow range slightly below the mark of 1.5730-1.5750. It will possibly be the further decline to the level of 1.5580-1.5600 and the pair growth to the resistance near 1.5800-1.5780. The medium-term risks are neutral while the pair is trading within the range, limited by the given marks.

The support levels are 1.5630-1.5650, and the resistance levels are 1.5730 - 1.5750.

MACD is in a neutral territory.

Trading recommendations

The range lower bound of 1.5510-1.5530 overcoming will point out to the downward trend continuation towards the level of 1.4980-1.5000 and then to the lows around 1.4810-1.4830. At the same time its breakthrough above 1.5870-.5890 will confirm the correction towards resistance towards the level of 1.6130-1.6150.

Yen

The Japanese yen is consolidating against the dollar. The main driver for this pair is the Fed and the BoJ monetary policy polarity, supported also by the US quite good economic data. The Japanese stock market optimism - Nikkei has risen by almost 1.0%. The bulls within the dollar/yen are aimed at breaking the important psychological level of 120.00-120.20. The pair increased above the level of 119.25-119.45 and tested the level of 120.00-120.20 at the Asian session. The pair is overvalued that increases the risk of the top formation and the downward correction.

The support levels: 119.05-119.25, and the resistance levels: 120.20-120.40.

The MACD indicator is in a positive territory.

Trading recommendations

In terms of the fundamental reason there are still no reasons for the yen buying, but the technical factors can trigger the profit-taking at current levels. It is possible that non-farm will become the reason for it.